MLC's response to the government announcement on bank deposit guarantees
Thursday, November 27th, 2008
Given the current market downturn, it is understandable investors are worried about their investments. In response to this, the Australian Government recently announced it would guarantee the deposits of all Australian banks for three years.
They did this, despite Australian banks being secure and well regulated, to give Australians confidence their cash is protected and to prevent panic withdrawals.
This has however created some uncertainty for investors in superannuation, pension and investment products, with some considering moving out of these products and into bank accounts.
Such a strategy can be at the expense of investors’ long-term investment goals, as it can have two undesired effects:
- Investors that sell down their investments effectively crystallise their losses;
- Investors may miss out on the strong equity rebound in equity markets that have historically occurred after a period of poor market performance.
MLC’s Cash Fund guarantee
At MLC, we understand the importance of secure cash investments.
And while it is not widely known, we have in fact always guaranteed the MLC Cash Fund in our MLC MasterKey super and pension products*.
So we are taking this opportunity to confirm and strengthen our guarantee on the MLC Cash Fund.
From Wednesday 26 November 2008, MLC will be extending this guarantee to the MLC Cash Fund in our MLC MasterKey investment products^.
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